Ahead of Chewy's Q1 Call: A Look at Forecasts, Trends and Fundamentals

Use an abundance of caution when placing any trades centered on this earnings announcement

• Chewy reports Q1 FY2026 earnings before the market opens tomorrow.
• The company is up over 40% in 2025 on strong growth in FY2025.
• Some key catalysts for the call include subscription momentum, customer retention and margin trends.

Since its initial pubic offering in June 2019, Chewy (CHWY) has been a mixed performer in the market. It was a darling in 2020 and a deplorable in 2021. It has found a channel in 2022 and has stuck with it. Its earnings have been a similarly mixed bag with two bad misses in its last six calls. After making three-year highs last week, all eyes turn to the pet food giant ahead of its earnings call tomorrow morning. 

Revenue, earnings and the forecast ahead

Consensus analyst estimates for Chewy’s earnings per share (EPS) and revenue are $0.17 and $3.08 billion, respectively. Active customers are forecast at 20.6 million, reflecting a moderate increase of 3% year-over-year (YoY). Analyst ratings and price targets are highly mixed but hover between hold and buy, with price targets ranging from as low as $27 to as high as $60. 

Analysts also look to pet adoption trends in general to anticipate Chewy’s growth. Those indicators have stabilized in recent months after a prolonged slowdown starting at the end of 2024. Investors will also be pay a great deal of attention to Chewy’s “Autoship” service, which enables customers to opt in for recurring deliveries of pet necessities.

There is also some short-term uncertainty for the company at the moment, as it has already announced its CFO will be leaving the company by the end of the month; though there is an argument to be made that the market has already had enough time to price in that information. 

A look back: Chewy’s recent momentum

Chewy’s Q4 FY2025 earnings call at the end of March blew consensus estimates out of the water. The company reported an EPS of $0.05 per share on estimates of $0.027, and revenue of $3.25 billion (+15% YoY) on estimates of $3.2 billion. 

Its primary drivers of growth in that quarter were an increase in active customers and increased adoption of the Autoship service, with a slight improvement in gross margins. This earnings call led to a rally of over 20% in the last two months, and Chewy just touched a three-year high of $46 on June 6. 

Bullish drivers and bearish brakes

Four key catalysts could move Chewy one way or the other after this earnings call:

1. Autoship momentum: Almost 80% of the company’s net sales come from Autoship; trends here will signal durability. If subscriber count is up more than expected, it could trigger a bounce. If it is up less than expected, or falls, it could trigger a dive. 
2. Customer retention: Chewy’s projected active customer growth of 3% is modest as is. Any slowdown or miss of these projections could put selling pressure on the stock. 
3. Margin trends: Chewy’s Food and Pharmacy revenue segment, as well as sponsored ads, drove margin growth last quarter. Continued EBITDA or gross margin commentary will be very important to the stock’s performance after the call. 
4. Guidance and outlook: As is typical this year, forward guidance may matter more than the actual numbers from this call. Any updates to top and bottom-line guidance for FY2026 could have an impact on share price, especially if they’re drastic. 

Besides those four core criteria, other factors that will play a lesser part in the company’s post-earnings move tomorrow include analyst sentiment, price targets and macro consumer risk. 

Final thoughts before the call

Chewy is a highly mixed bag that’s very tough to pass judgement on headed into tomorrow’s call. Numerous bullish and bearish factors are at work and attempting to game out which ones will take priority over others is both challenging and dangerous. Any trades centered around this call should be placed with an abundance of caution. 

Chewy may sell food for both bulls and bears, but both can’t be right tomorrow morning.

Gus Downing is host of the tastylive Network show Risk and Reward. @GainsByGus
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